Banks, Computers, and our payment systems;

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by W. Putnam Livingston
Commercial banks in the United States are under­going
a change in character. A dynamic quality has crept
into the industry. Today a young man who is anxious to
move ahead can find a piece of action waiting for him in
banking. This is largely the result of strategic planning,
it is mandatory for banks to have staffs that can develop
new concepts and implement them for the benefit of
society.
Banks keep up to date with local, national and interna­tional
affairs, and they know they have to do this to sur­vive.
In fact the way bankers have plunged so enthusi­astically
into market studies, E.D.P. services, and credit
cards, reminds me of the remarks of the English econ­omist
Barbara Ward. In characterizing an American
business man, she said he was like the fellow who main­tained
nine wives with the certainty that he could even­tually
produce a child in one month.
Enlargement of the banking concept from the old
counting house days to those of scientific planning has
brought about many painstaking analyses by bank exec­utives.
One was to digest the possibility that the use of a
computer as an extension of the mind was important to
bank management.
Can a computer actually contribute to, and possibly
improve, the manner in which executive decisions are
made? At my bank we began to explore this possibility
ten years ago. Of course there were those die-hards in
the industry that said: "Banks can't be run by eggheads;
they have to be run by bankers." But this was not the
thinking of enlightened chief executives. From the be­ginning
they knew instinctively that new approaches
were mandatory in the changing world ahead.
One problem always faces new endeavors—recep­tivity.
Would any bank accept experimental thrusts into
its inner workings? What success would a college pro­fessor
have in developing mutuality at the highest level
of an awakened, but still somewhat staid, financial in­stitution?
The possibility of banks' finding these techniques
helpful drew the interest of the academic world, and
soon it was recognized as an important ingredient in the
pursuit of better management. Banks found that the sci­entists'
philosophy—the never-ending search for im­proved
solutions to complex problems—was a valuable
contribution to executive thinking.
In the last decade management science has grown
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